Underwater mortgages flood a California community
A stunning cover story in the New York Times today looks at the Central California community of Mountain House, where a record number of owners have seen the value of their homes fall below what they owe on their mortgages:
Because of plunging home values, almost 90 percent of homeowners here owe more on their mortgages than their houses are worth, according to figures released Monday. That is the highest percentage in the country. The average homeowner in Mountain House is "underwater," as it is known, by $122,000....
First American CoreLogic, a real estate data company, has calculated that 7.6 million properties in the country were underwater as of Sept. 30, while another 2.1 million were in striking distance. That is nearly a quarter of all homes with mortgages. The 20 hardest-hit ZIP codes are all in four states: California, Florida, Nevada and Arizona.
An accompanying graphic takes a closer look at the three counties that account for 13 of those hardest-hit ZIP Codes. Among them is Riverside County, where in San Jacinto 92582, 77% of all mortgages have negative equity; Lake Elsinore 92532, 71%; Winchester 92596, 70%; and Perris 92571, 69%.
-- Lauren Beale
Thoughts? Comments?
Photo: A shopper walks down Main Street in historic downtown Lake Elsinore. Credit: Los Angeles Times
For 7 years, money rained from the sky day after day, month after month, season after season.
After the deluge, anyone who hasn't taken the precaution to buillt himself an ark and saved a pair of each type of assets - gold coins, cowrie shells, vegetable gardens, etc - can be expected to be drowning.
Posted by: MyLessThanPrimeBeef | November 11, 2008 at 05:23 PM
I wonder what it is in the all new communities of The OC, like Ladera Ranch(92694), or Quail Hill (92603)?
Posted by: FreedomCM | November 11, 2008 at 05:29 PM
Lauren- isn't to say these days that homeowners owing more on their mortgage than what its worth is to state the obvious?.....or maybe it isn't so obvious when you report these alarming numbers. True this blog thru both Peters and yourself have been beating this drum for the last year, but I don't think any of us who commented regulary forsaw whats really about to hit, maybe with the exception of Laker,Cal and a couple of others, but the (negative) impact that mortgage banking and real estate has made on the economy on the level that it has is suprising, at least to me.
Posted by: Nelcisco | November 11, 2008 at 07:50 PM
"My house is underwater, so I’m not doing too much impulse shopping..."
Oh yes, what was this country built on if not knowing to cut back on impulse shopping when going heavily into debt. Lookout, Greatest Generation, you've got competition!
Posted by: PeteR | November 12, 2008 at 12:38 AM
There's a certain amount of statistical anomaly at work here--I'll wager that most RECENT mortgages almost everywhere in the country are technically "upside down", this one California locale probably just has the misfortune of having a lot of new housing. In older communities where there are a lot of old mortgages the owners are likely still losing big equity even if they're not technically "under water"...
Posted by: Rich | November 12, 2008 at 02:27 PM
These people should simply tell the mortgage holders to refinance them now. If they don't want to, they might as well as walk away from the house now, before they waste to much money on it.
$12,000 a month payment? LOL!!!!!!!!
Posted by: syscom3 | November 12, 2008 at 05:32 PM